A few days ago, I received a press release telling me that Universal Music France was settling inFrench-speaking Africa. Which, frankly speaking, is nothing new; we’ve known for months that Universal Music (France) was starting an activity in Africa, namely by opening offices in Dakar and Abidjan. Pascal Nègre had also referred to this during the 2013 Midem.
Within this context, Universal Music had also launched its first talent show, Island Africa Talent, co-produced with Canal+ (both being members of the Vivendi group) and
broadcast on the new channel A+, launched in October. Island Africa Talent was produced with a €4 million budget, following 7 casting shows throughout 12 countries of French-speaking Africa. The investment was shared between A+, Universal, Code Films and sponsors Airtel Africa and Unilever.
The question here concerns the business model and export. How does Universal intend to make money here? We are far from the battles over copyright or whining about streaming. Furthermore, the local music industry is not homogeneous at all. If some countries are getting very well structured, others still have a long way to go so how will Universal help the artists it signs to export their music? There are 54 countries in Africa but then how about the rest of the world?
The settling inside these new markets cannot take place by literally transposing the American or European models. And namely concerning digital music, which is one of the main elements driving the increase in mobile phone subscription sales in Africa.
The DBTH Agency is now working more and more on the continent of Africa, for artists as well as platforms strategy or the development of mobile apps. We work with streaming/downloading/distribution platforms which all share a Pan-African orientation. We’re also moving forward with France Média Monde (RFI) concerning a health-related web application contest in the broad sense, throughout French-speaking sub-Saharan Africa and I also act as a mentor for VC4Africa. Within this framework, we have the opportunity to work with numerous local partners, incubators, entrepreneurs, artists, agencies and platforms, which has led us to make a certain number of acknowledgements.
According to the new study by Balancing Act published in November 2014, few people are aware of this but there are now more than 100 legal downloading platforms dedicated to Africa, offering streaming and downloading, in addition to web radios and phone ringtones.
Some of these platforms have partnered with giant groups among which telephone operators like Orange, MTN, Vodacom, Safaricom and Airtel. As for African operators, promoting these services has become a genuine competitive advantage and provides even more reasons for customers to purchase the Internet services on offer. Analysts at « Balancing Act », who have been following the development of this segment since 2008, consider that this market is ready for telephone operators to launch these services.
The long history of African music is timeless, orally transmitted from a generation to another. It is ancient, rich and diverse, and each region and country presents its own musical characteristics. This music is the very root of current styles:blues, jazz, rock, reggae, soul, funk, pop, coupé and many more, not forgetting rap.
But due to a limited access to international music distribution networks, few people in Africa and outside the continent may access contemporary African music (and we won’t even talk about monetization). And today, information concerning African music is difficult to find, as it is scattered across the web, either randomly or specifically for a given country. It is indeed the same thing for African music. Only a few African artists really manage to do well. But this is gradually changing with the emergence, for the last two years, of musical platforms dedicated to African artists and available worldwide. These platforms represent a new distribution channel for music all around the world.
Communication networks, the web and digital networks in Africa are the backbone of on-demand music platforms, able to reach a great number of customers in the years to come. These music platforms will also help operators to sell more broadband Internet subscriptions in Africa, therefore enabling people to access other services, like supposedly “vital” apps.
In terms of access to technologies, fiber, the deploying of Wi-Fi, 3G and Vsat can already provide some of these services. Significant investments have been made in Africa since 2012 in 4G and in LTE. Until now, in its survey, Balancing Act has counted 63 LTE – 4G projects within 24 African countries, most of which inside urban areas.
Concerning the use of these digital services, Balancing Act estimates that in 2014 there were 10 millions of regular users in Africa and this number could be multiplied by 10 in the next 5 years.
For example, launched in October 2012 from Nigeria, iROCKING has become the leading player among the on-demand music domain on the continent. Its use has skyrocketed and today it counts one million monthly users all around the world. iROCKING is both a YouTube competitor and partner.
Here are other serious competitors focused on Africa: Simfy Africa, Anghami, Afrinolly of “Fans Connect Online”, Spinlet, Truspot, Mziiki, Mdundo, BiGxGh, Pliby.com, The Keek (of Universal Music), Yala and Waabeh. However few international platforms like Deezer, iTunes, Nokia Mix Radio, Rara, Rdio, Simfy or Vimeo are being used on the African market. Some rumors indicate a possible launching of Spotify in South Africa for the end of 2014… Hundreds of potential partners exist for on-demand music platforms in Africa. For example, Trace Tv, Airtel and Mahindra Comviva have launched a new pan-African mobile music contest.
Nonetheless, a few reservations can be had about all this. Locally, as far as artists are concerned, the situation is more than difficult. They all strive to market themselves in Europe and towards the United-States, even to leave their country as soon as possible. The collective management of copyright does not exist, the system is far too corrupt and the amounts that may be collected are not – if ever – properly redistributed.
There is an abuse of dominant position by Spinlet and Iroking which exploit catalogues in the utmost opacity. Many artists after signing with them end up stuck because of their contract. There surely is a market but it mainly concerns companies exploiting music services, as for artists/writers/composers/labels, the system is far too corrupt and piracy is far too developed to have any hope of earning anything. For most people there, it is unimaginable to actually pay for music, and most artists who export their music abroad and then sell their music via legal services are very poorly looked upon locally. For, locally, most of the activity lies in live events and a couple of partnerships with brands (like Wiyaala partnering with Pepsi in Ghana).
On the other hand, though some refer to an “African development”, and a “new African revolution”, the sub-Saharan African region gets the worst results on a global scale in terms of difficulty in launching start-ups – according to a study by the Global Entrepreneurship Index (GEI) 2015, which evaluates the entrepreneurial ecosystem in 130 countries.
If entrepreneurship is in full bloom on a global level, with USA ranking first, followed by Canada, Australia, UK and Sweden for the top 5, sub-Saharan Africa comes last while DRC is… not even part of it.
Within the sub region, South Africa is the leading African nation and ranks 52nd worldwide with an average score of 40, in front of Botswana (66th), Namibia (69th), Nigeria (84th) and Kenya (86th). Five African countries rank in the last seven positions, namely Burundi (124th), Ethiopia (125th), Chad (126th), Malawi (128th) and Uganda (129th). According to the report, Senegal (96th) is majorly handicapped by a lack of talents for Startups, while Benin (102nd) and Mali (113rd) suffer from a lack of Networking.
The report also indicates that the main handicap for Africa is its gross enrolment rate in tertiary education being the lowest in the world and, according to GEDI, this rate is one of the most important elements in terms of favoring entrepreneurial ecosystem. Many other criteria should also be taken into account here: business environment, lack of connection or difficulty in finding funding sources…
There is still a long way to go but here are some clear objectives: connecting North and South by also allowing the diaspora to keep a close watch and become intermediaries. Implement all possible means to support and develop music/tech entities to allow the rapid and sustainable development of a new digital economy on the African continent for the music industry players in Africa.
We want to believe that this collaboration will allow the rapid and sustainable development of a new digital economy on the continent for the music sector’s players in Africa.
Virginie Berger is the founder of the Paris based global strategy agency DBTH. She loves Music and she is obsessed with Technologies. So shes does both. Her crazy mission: DBTH works with all those involved in the technological and musical ecosystem and provides them with offers covering business management as well as international representation.